Yahoo Finance's Myles Udland, Brian Sozzi, Julie Hyman, and Dan Roberts discuss outlook for movie theater attendance as COVID-19 cases continue to rise.
MYLES UDLAND: All right, well, the auto industry has had a very nice pandemic here. The movie business, of course, under a tremendous amount of pressure. Now, certainly folks do not want to go to the movies because of the pandemic, but Dan Roberts joins us now for the latest Yahoo Finance Harris poll which suggests, Dan, there are some other issues facing the movie-theater business that are beyond the pandemic and I think quite troubling here, at least as I kind of scan the survey.
DAN ROBERTS: Yeah, it is troubling, Myles. And you know I'm a movie-theater guy, so I'm rooting for the future of this industry, but boy. It's largely COVID, and yet there are other issues.
One of them we know. Streaming has exploded in popularity during the pandemic. That was already happening, but like many other things-- and you know this is one of my favorite business stories during the pandemic-- which things that have accelerated during the pandemic will stick around even once the pandemic is gone? And I think streaming is one of those.
So in this Harris Poll survey, people were asked if you haven't gone to an indoor movie theater since the start of the pandemic and movie theaters have reopened in your area, why? You've got 56% of people saying concerned about COVID-19. Fine. But this was multiple choice. You've also got 22% of people saying there was no movie I wanted to see in theaters. Well, that's probably pandemic related too since so many big blockbuster movies were delayed. But then you've got a fair number of people, 20%, saying I would rather just stream movies online.
And I think that is a concern for this industry. That is a secular concern. That is not just pandemic related. People saying, wait a minute. Why do I need to shell out the money to go to a theater when I can just watch it in the comfort of my own home?
Now, of course, I believe there's a lot of nice things about seeing it in the theater. You know, you see a Marvel movie in the theater. There's a lot about the crowd experience, sharing it with other Marvel fans, but whatever. And then a third of people also saying that they plan, regardless of the pandemic, to go to movie theaters in 2021 less often than they did in 2019. So I think there's a few things this industry should be concerned about.
Now, look, if you had a vaccine sooner or later, I think that helps a lot. But look no further than the recent headlines about AMC to see how concerned this industry is. AMC now offering 20 million shares. Just filed to offer a new 20 million shares, looking to really rapidly raise cash because the situation is dire for these companies. Even this week with the encouraging news about Pfizer and a vaccine, well, it doesn't mean the pandemic is going to end next week.
So it's going to take a while for things to bounce back. It's going to take a long time for people to feel comfortable going to a theater. And then obviously based on this survey even once people do feel comfortable COVID-wise, they might just shrug and say I don't need to go to a theater.
JULIE HYMAN: Yeah, and Dan, you mentioned AMC, which is obviously fighting for its life here and having a big cash burn. And it's interesting. You know, it's sort of happy with what it can get. It announced it is now expanding that pilot program where you can rent the whole theater for, what, starting at $99 I think depending on the movie that you're going to see because I guess $99 is better than $0.
DAN ROBERTS: Well, right. Julie, I love to say, do you want some money or do you want no money? But that said, the $99 headline is a little misleading. You pay another $250 fee if you want to bring in your own food, and you've got to bring in your own food. You're not going to rent out the theater with a bunch of friends and not want to bring in food. So it ends up not being $99.
Now, still pretty cheap when you consider the size of these rooms and that you're able to rent it out. And then, of course, depending on how many people you bring along, divide it up. Probably not too expensive.
But yeah, the company needs cash. And by the way, we should say this isn't just an AMC thing. Some of the other theater chains, including Aramark and then also you've got Alamo Drafthouse, have tried similar things-- you know, rent out a theater, $99. Get the cash wherever you can because the situation for movie-theater chains is dire.
And now one more point I like to say. I think a lot of them, just like brick-and-mortar retail, probably just overbuilt in the boom times. You know, I don't think theaters are going to go away forever, but you're to see a lot of locations close.